After years of delays, China finally issues 3G licenses

IDG News Service — Wed, 07 Jan 2009 17:49:39 -0800

China's Ministry of Industry and Information Technology (MIIT) finally granted 3G licenses to the country's mobile operators on Wednesday, bringing to a close years of waiting and delay.

There were no surprises contained in the MIIT announcement (in Chinese) that three licenses were issued for 3G services.

As expected, the country's largest mobile operator, China Mobile Communications, received a license to operate services using TD-SCDMA (Time Division Synchronous Code Division Multiple Access), a standard that's unique to China and largely unproven. TD-SCDMA has been a focal point of Chinese telecommunications research and development, and 3G licenses were pushed back repeatedly in recent years as companies scrambled to get the technology ready for commercial deployment.

The two smaller mobile operators were given licenses for established 3G standards that are used more widely around the world. China Telecommunications (China Telecom) was awarded a license for CDMA2000 EV-DO (Evolution Data Optimized), while China United Telecommunications (China Unicom) received a license to offer WCDMA (Wideband CDMA) services -- the most widely used 3G standard, with hundreds of millions of users around the world.

While China Unicom and China Telecom may appear to have an advantage by using established 3G standards for their services, MIIT's announcement made it clear that the success of China Mobile's TD-SCDMA service will remain a priority for the government.

"The development of TD-SCDMA holds an important position in the development of 3G. The Ministry of Industry and Information Technology, the National Development and Reform Commission, the Ministry of Finance, the State-owned Assets Supervision and Administration Commission, the Ministry of Science and Technology, and other related departments are developing policies to support the development of TD-SCDMA," the MIIT announcement said.

"There has been much talk about EV-DO and WCDMA being more established and widespread 3G technologies than TD-SCDMA, but we don’t believe this is much of an advantage for China Telecom and China Unicom," wrote Ovum analysts Charice Wang and Raymond Yu in a statement.

They said the Chinese market is large enough to support the development of a third 3G standard, and said the technology has "immense government backing."

"It is not a matter of ‘if’ TD-SCDMA will succeed, but a matter of when," they said.